THE clamour of discount shoppers remains as loud around the catwalk as in the supermarket aisles. Look at Primark, where the passion for hot fashion at low prices helped keep a recent dip in sugar prices from souring the results of Associated British Foods, its parent company. While its four per cent like-for-like growth is nothing to be sniffed at, the real secret of the retailer’s success is its rate of store expansion. Sales for the first half of the year were up 14 per cent overall and profits were 26 per cent higher on the previous year.
More space plus more sales per square foot equals a winning design. That presumably is the thinking behind Primark’s latest overseas venture to the US. Its first Boston store will be 70,000 square feet. High sales volume in a barn like that will augur well for wider expansion.
Topshop’s recent success across the Atlantic shows a UK firm can make it on the US fashion scene, but of course now Primark has to compete, not just with local low-cost chains like Target but all the fast fashion favourites from Europe that have beaten it to American soil – notably Zara and H&M. Uniqlo is also building up a stateside portfolio of stores, with its first Boston store opening this autumn. H&M and Zara both already have branches in Boston – H&M’s is even in Downtown Crossing, the same district as the new Primark flagship.
Primark is a company in its prime. But turning up this fashionably late to the US party, it will need to make quite an entrance.